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If a monopoly follows a pricing model where P=LMC, it is an allocatively efficient equilibrium, but...

If a monopoly follows a pricing model where P=LMC, it is an allocatively efficient equilibrium, but do you think that is feasible to continue operating in the market? (10)

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Answer - The monopoly firm exists for earning the positive economic profits. The level of P = LMC is not doubt allocatively efficient , but it will not yield the positive economic profits for the monopoly. P = LMC , is the level of attaining efficiency , but the monopoly firm will not be feasble in opersting at this level , because it will not be able to decrease the level of output and charge more price at this level. Hence this is not feasble for monopoly.

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